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Senators Call for Resignation of Medicare Public Trustees

Senate Finance Committee Chair Chuck Grassley (R-Iowa) and ranking minority member Max Baucus (D-Mont.) on Friday urged Thomas Saving and John Palmer, the newly reappointed public trustees of Medicare and Social Security, to resign their positions and refrain from signing the annual report on the systems' finances, CQ Today reports (Bicknell/Wayne, CQ Today, 4/28).

President Bush last month recess appointed Palmer, a former dean of the Maxwell School of Syracuse University, and Saving, an economist at Texas A&M University, to a term that will end after the next Senate session in late 2007. The two have served as public trustees on the board since 2000, and their four-year term has expired.

However, under the Social Security Act, Saving and Palmer were allowed to complete work on a fifth annual report on the financial condition of Medicare and Social Security. In November 2005, Bush nominated Palmer and Saving for second four-year terms, but the Senate has not held confirmation hearings on the nominations.

Senate leaders of both parties have said that they prefer to follow the precedent of no more than one term for public trustees. The lack of confirmation of the nominations has resulted in the delay of the Medicare and Social Security financial reports for 2006 (California Healthline, 4/20).

Letter

Grassley and Baucus in a letter to Bush, Saving and Palmer said, "Both Dr. Palmer and Dr. Saving served admirably as public trustees during their term. However, we believe the events surrounding this appointment threaten the integrity of the nomination process and the credibility of the position of public trustee."

They called on Bush to submit new nominees to fill the positions and said they will introduce legislation next week to limit all future public trustees to a single four-year term. Grassley and Baucus also alleged that Saving and Palmer had served as "paid consultants" to the Bush administration after their terms ended, representing a potential conflict of interest.

Reps. Pete Stark (D-Calif.) and Sander Levin (D-Mich.) also sent a letter to Bush on Friday saying Saving and Palmer should not sign this year's financial report on Medicare and Social Security, scheduled to be released Monday.

Response

Saving on Friday said that he will not resign and that he planned to sign this year's report. Saving, who said he "doubt(s) very much" that Palmer plans to resign, noted that the Senate Finance Committee "had lots of time to inform us they didn't want to do this, and they didn't do anything."

Saving also said he and Palmer were not paid by the Bush administration for providing their input on this year's report, saying, "We were indeed advisers. But I wouldn't have accepted any payment from them -- we were at that point the nominees" (CQ Today, 4/28).

Significant Medicare Reform Unlikely

In related news, debate over reforms to Medicare and Social Security is "certain to be revived" after the trustees release their report on Monday, the AP/Minneapolis Star Tribune reports. Last year's report estimated that the Medicare trust fund would be depleted in 2020, and this year's report is not expected to change that estimate significantly, according to analysts.

Federal Reserve Chair Ben Bernanke last week urged lawmakers to enact changes to the programs soon, saying they will consume about 16% of the total U.S. economy by 2040, double what they do currently. Still, the prospects of "any ... major effort to deal" with Medicare and Social Security do "not look promising given that this is an election year, and Bush, facing the lowest approval ratings of his presidency, has other problems to deal with, from the Iraq war to soaring gasoline prices," the AP/Tribune reports.

David Wyss, chief economist at Standard and Poor's, said, "As a lame duck administration, it is very hard to get anything as major as this through Congress." Meanwhile, some analysts say the next President also could "shy away from tackling entitlement reform, given that any solution will require making painful political choices," according to the AP/Tribune (Crutsinger, AP/Minneapolis Star Tribune, 5/1).

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